Lessons I Learned from my Outsourcing Career

Jonathan Smith, COO

05 August 2014

About me

From Sydney, Australia

Two decades in the BPO and contact center industry

Been in the Philippines since 2002

COO and founder of SHORE Solutions

Provides overall strategic and operational responsibility for all contact center and BPO programs

The Philippines is the best place for

offshoring

Industry figures

2000 2010 2013 2014 20160

5000

10000

15000

20000

25000

10 500 900 1000 130040

8500

1330015500

25000Phil BPO industry growth

FTE Revenue

FTE (in K); Revenue (in M)

Source: IBPAP, Philippine broadsheets

2014 Tholons Top 100 Outsourcing Destinations: Rankings

Source: Tholons Advisory, Investments

and Research Service, Dec. 2013

Note: 7 locations of the top 100 are in the

Philippines (Manila, Cebu, Davao, Sta. Rosa,

Bacolod, Iloilo, Baguio)India Philippines Malaysia0

10000

20000

30000

40000

50000

2200 769 45

47000

12700

1700

Asia comparo

FTE Revenue Source: Asia Sentinel, 2012

CAGR of 25% from 2006 to 2012

Studies show that India’s BPO sector continues to lose grip and has lost 10% market share over the last five years.

It’s more fun in the Philippines

Low labor and operating costs

Highly skilled and diligent workforce

Cultural compatibility with both East and West

Affordable and stable telecoms infrastructure

Cost-effective, Class A office spaces

Strong government support for the BPO industry

IBPAP talent devt initiatives

Global Competitiveness Assessment Tool (GCAT)• An industry developed test to assess competencies

in basic skills for employment in the IT-BPO and GIC and other service industries

Service Management Specialization Track (in Undergraduate Education)• A 21-unit minor course or specialization track taken

by business and IT majors in college intending to go into IT-BPO and GIC or other service industries.

Industry-academe partnership

A company’s success hinges on the quality

of its people

Business transformation

Acquisition

• Leadership without direction

• Right people in the wrong roles

• High level of dysfunction• Siloed operations

Full integration/right management

• Aligned people to the right roles

• Higher productivity• Collaboration• Acquired entity went from major loss to profitability in 18 months

Realignment

It’s a people business

Targetedrecruitment

Targetedrecruitment

Tailor-fit training programs

Tailor-fit training programs

Continuous learning and development

Continuous learning and development

Consistent performance management

Consistent performance management

Innovative rewards and recognition

programs

Innovative rewards and recognition

programs

Quality trumps

cost

Don’t give in to pricing pressures

Captives do it alone and pay above industry ratesYear-on-year escalations and inflation (e.g. power and rent)

Clients offshore purely on cost savingsNo long-term benefits and no long-term client relationships

Scen

ari

o 1

Scen

ario

2Sample scenarios that result in unsustainable outcomes

Offshoring must be with a view to achieve better customer service and delivery

Differentiation is important

Innovative outsourcing models

Comprehensive outsourcing

BPO - Operations Manageme

nt

Co-sourcing

Employee compensatio

n and benefitsShared support services

Asset services

Facilities outsourcing

Dedicated work areaMenu of shared support services/assets

Build-Operate-Transfer

Re-evaluating your business

regularly is critical

SHORE evolution

As with any business, listen to your clients

and understand their needs

Big enough to matter, small enough to care

• Financial services institutions

• Telcos• Food service businesses• Telcos & MVNOs

• Technology & IT companies

• Logistics companies

• Energy & utility companies (incl. telcos)

• Technology & IT companies

• Consumer business/Retail companies

• Financial services & debt collection

Understand cultural and generational differences, adapt and

refine

Cultural considerations

Western influences dominate but local characteristics prevail

There is no right or wrong – things are what they are

Cultural training is essential

Source: The Filipino IdentityGuillermo Gómez Rivera and José Mario S. Alas

East vs. West

Icons designed by Liu Young

Opinion Punctuality

Problem-

handling

Anger

Trendy “Boss”

Millenials think differently52 percent of the world’s population is under 30; global youth market will represent 75% of the available workforce and account for 70% of the world’s spending power by 2020.

Tech/web savvy – “Born digital”• Instant communicators via email,

social networks or text messaging

Family oriented• Flexible working schedules and a

more rounded work/life balance

Confident & ambitious• Expectations need to be managed

without stifling creativity and development

Team players• Regular team meetings and

collaboration with colleagues; wants to be involved and included.

Like to be loved• Constant feedback, gratitude,

relaying to someone they are doing a good job – mentor schemes

SHORE Success

Summary

The Philippines is the best place for offshoring

A company’s success hinges on the quality of its people

Quality trumps cost

Differentiation is important

Re-evaluating your business regularly is critical

Understand cultural differences, adapt and refine

www.shoreoutsourcing.com